Construction Figures Continue to Fall in France

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The number of new homes built in France fell by almost 19% in the second trimester. The trend doesn’t seem to be improving as the number planning permission granted is still contracting

Figures for completed houses and apartments in France have continued to contract during the second trimester, falling by 19.3% between April and June to a figure of 69,532 units, according to the statistics from the Ministry of Ecology published yesterday. The construction of new homes contracted by 18.7%, while that of existing buildings fell by 24%. The construction of ordinary dwellings was down again by 21.9% to 63,338 units, compared to a contraction of 21.4% from March to May. In contrast, the social residence sector (seniors and students) was up by 20.9% between April and June to 6,193 units (as against an increase of 9.7% at the end of May).

Over the twelve month period between July 2013 and June 2014, the number of new dwellings being built shows a more modest contraction of 10.7% to 305,654 units. However, this figure represents the lowest since November 1998. Lower again was the figure between June 2013 and May 2014 (8.5%) and the 12-month period to the end of April 2014 shows just a 6.5% drop.

The outlook is not for any resurgence in building activity in the near future – with planning permissions granted on a downward trend; the determining factor for future building numbers. These have fallen by 12.5% between April and June compared to the same period last year. The picture is slightly better than it was at the end of May, when the drop was 16.1%, although that in itself is certainly no indicator of a robust resurgence. Over a 12-month period, the drop in the number planning permissions granted is 20.2% at 387,748 units, similar to that recorded a month earlier (-20.7%).

Despite the calls of PM Manuel Valls to relaunch the building sector and the hope that the government objective of 500,000 new buildings per year can still be achieved, the building business remains in the doldrums. Concrete steps will have to be taken in September if some life is to be breathed back into the construction industry. Amongst those measures is a new zero-rate loan for households who buy a second-hand home in the country and carry out work on it. The Minister for Housing (Ministre du Logement) Sylvia Pinel thus hopes to give a boost to the building crisis and to eradicate the deficit of her predecessor Cécile Duflot, whose actions were thought by many to have exacerbated the paralysis of the building sector.

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